I last wrote about Advanced Energy Industries (NASDAQ:AEIS) in September and said, "I don't think the semi-cap cycle has peaked, so growth/momentum investors may still find more room to run with Advanced Energy." The shares have shot up another 60% since then, outperforming other semiconductor equipment stocks I've liked, including MKS Instruments (NASDAQ:MKSI).
This performance hasn't been just hype and hope, as Advanced Energy has been outperforming its own guidance and seeing solid evidence that opportunities tied to new chip architectures, advanced packaging, and non-chip markets like OLEDs are converting to actual orders and revenue. Bulls may argue that these drivers will lead to a substantially greater addressable market and a longer up-cycle, and I don't necessarily disagree.
Likewise, Advanced Energy has plenty of room to grow outside of its core semiconductor market(s). All of that said, I can't make a quantitative value argument here, so these shares really only seem appropriate for investors who want to take on the risk that the good times can still get meaningfully better before valuations come back to a lower orbit.
Read more here:
The Good Times Get Better For Advanced Energy Industries